Posted on 10/12/2011 7:04:06 AM PDT by SeekAndFind
Via Breitbart TV, the soundbite of the day from tonight’s debate. Is she right? According to Josh Barro (via our pal Karl), maybe so:
Herman Cain’s 9-9-9 plan includes a personal income tax, a business tax, and a sales tax, all at flat rates of nine percent. Bruce Bartlett critiques the plan in the New York Times today, and he flags a fact about the business tax that I hadn’t been aware of:
“The business tax in the Cain plan bears no resemblance to the present corporate income tax. The tax would apply to gross sales less dividends paid and all purchases from other companies, including investment goods. Thus, there would be no deduction for wages.”
This is far more similar to a value-added tax than to a corporate income tax. And indeed, the description on Cain’s website matches Bartlett’s, saying the business tax would apply to “Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.” One question is what Cain means by “gross income,” but I think he has to mean something like gross revenue–anything that looks like a profits concept would already exclude “purchases from other businesses” and so they would not be there to deduct.
In other words, in effect he’s proposing both a sales tax and a de facto VAT that’ll operate as a second sales tax on top of it. I’m not sure Bachmann realizes that or else she would have nailed him on it right here. Bad enough that Congress gets to play with one new “invisible” tax on consumers, but two?
“For every complex problem there is an answer that is clear, simple, and wrong.”
H. L. Mencken
You think not? How about this...
Nazi Pelosi or one like her gets control of Congress. Propose to take the 9% tax off food in exchange for adding it to purchased services by those earning over 250K ?
There are a million ways the RATS can play with that new ‘sales tax toy’ and cram it through.
Cain is naive when it comes to politics.
9% sales tax will have the same effect as the luxury tax.
unfortunatly for most people food and rent is not a luxury.
..she drove over the cliff with that one—she’s done...
“Cain is raising a very vital and critical issue. It is essential that we get people in that bottom 47% paying taxes again, sharing in the burdens and getting engaged in the discussion of exactly WHAT government should be doing and HOW it should be paid for.”
Man that is worth mentioning again.... I agree
It also takes away the class warfare component the left so loves to use.
“9% sales tax will have the same effect as the luxury tax.
unfortunatly for most people food and rent is not a luxury.”
But at least everyone would pay 9%.
The present situation has many paying nothing, and even receiving more money back than they should.
unfortunatly for most people food and rent is not a luxury.”
Cain attempted to counter that by saying the poor tend to buy used things.
My answer to the $9.99 book salesman...I'm not going to eat ‘used’ food, but he is very welcome to do so.
She jumped the stupidity shark with that one
So in the absolute worst case, Cain’s plan would be no different than the system we have today. Congress has that authority RIGHT NOW. They don’t do it because it’s political suicide.
Hell, even with both houses of Congress and the Presidency they didn’t raise taxes via the expiration of the Bush tax rates. That should tell you something.
Walter Mondale ran on higher taxes. How’d that work out for him?
Bible illiterates should learn to take a joke.
9,9,9 very dangerous how????
Oh you mean politicians can’t HIDE taxes like you can in the current tax code? Perhaps you meant politicians can’t play the class warfare game the current communist progressive tax code?
The best part about it is that you control your own taxes by consumption. Thus, the less you consume the less taxes you pay. Kind of like our gas tax? Makes sense to me.
BTW, what tax plan does your candidate have??? Oh yeah that’s right NOTHING!
“If we can’t depend on this, then WE’RE SCREWED BIG TIME.”
Fair point. But a) strictly speaking, Cain’s plan is unconstitutional. The federal government is not constitutionally permitted to levy a sales tax. The only reason an income tax is allowed is because of the 16th amendment; b) leaving aside constitutional constraints, I’d be comfortable with Cain’s plan if and only if we first repealed the 16th amendment and then also passed a balanced budget amendment that capped total government spending at some reasonable fraction of GDP (e.g., 25% for F, S, L sounds nice). Otherwise, the criticism of several of the candidates last night is correct: Cain’s plan simply opens up 2 new massive spigots of federal revenue.
No, it is a stretch of reason to turn 9-9-9 into 6-6-6.
I love Bachmann, but your, and her, argument flies in the face of reality and sounds more like a liberal, emotional argument.
Yes, the +50% of the population THAT PAY NO TAXES will have to BEGIN to contribute their fair share of the load. Something as good as being here with all the perks and protection should not be free for ANYONE.
Amen Brother! I’m firmly in the Cain camp now!
BTW, I love how Blomberg made sure Cain could not respond to the lie pushed by Bachmann of this 9,9,9 plan is an ADDITIONAL TAX and not a REPLACEMENT.
I have lost all respect for Bachmann and Santorum...
All I can say is A.M.F. to them.
Yep and later when Cain responded to the critics and said the USA needs bold leaders with plans like 9-9-9 not ones who "look for what they can pass" he got the loudest and longest applause of the night.
So while no one WANTS to pay a sales tax, everyone wants leadership on this issue.
Agree she seems to be the only one with any logic and has some good ideas.The rest of them are just pipmping for the job.
“We can start by critiquing his argument that it does away with Payroll, Dividend, and other taxes that he claims will INCREASE the wage earner’s salary and SIMPLIFY the tax code so that businesses and individuals don’t have to spend hours and hours doing their tax forms or even paying others to do it for them.”
You know as well as I do the way things work in DC. Spending increase now, cuts later (ie never).
Same will happen to this plan. Sales Tax now. Reform the code later (ie never)
I wouldn’t even propose new streams of revenue before current streams are dismantled completely...or at the very last bring the income tax rate down to 9% or less first.
It is dangerous because it introduces totally new tax (that is guaranteed to go up once Dems gain power again).
Pretty soon we have 20-20-20 or 9-9-20. It is easy to argue for that “extra 0.5% for the blind orphans/911 widows etc”
I can’t believe how some freepers tout the “it has protective measures preventing future tax hikes”. Even a third graders knows that Congress is not bound by any measures in existing law as it can freely rewrite the law anytime.
The business tax aspect has some complications ie service tax between companies, but it isn’t clearly explained yet.
Btw, I don’t have a candidate now and I like Cain, but if he can’t move on from 999 to other issues, he will be one issue candidate (and besides, this has zero chance of getting passed anyway). Simply cutting spending, extending current Bush tax cuts and maybe lowering corp tax rate to be in line with Canada would be good enough.
No Bartlett is shamelessly misleading. VAT taxes all purchases, including investment goods. Barlett's own quote shows this claim about "being like a VAT" is completely nonsense. Either Bartlett has no idea how a VAT works or he is recklessly disregarding the facts.
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